DNA-PEOPLE'S LEGAL SERVICES

2024-003 FOLLOW UP ON THE LEGAL SERVICES CORPORATION OFFICE OF THE INSPECTOR GENERAL - AUDIT OF SELECTED INTERNAL CONTROLS Funding agency: Legal Services Corporation Title and Assistance Listing Number: Basic Field Grant 09.703068 Type of Finding: Significant Deficiency, Material Non-compliance Compliance Area: Allowable costs/cost principles Federal Award Year: 2024 Questioned Costs: None

Condition The Legal Services Corporation Office of Inspector General issued a final report (OIG Report) on December 2, 2024 for its testing of internal control and operational activities and noted inadequate policies, practices, and oversight over ten of eleven areas (formalize internal controls in writing for fixed assets, cost allocation, credit cards, contracting, derivative income, general ledger and financial control, disbursements, budgeting and management reporting, payroll, and client trust funds for the period of January 1, 2022 through April 30, 2023.

Given the timing of the December 2, 2024 OIG Report, certain conditions existed during the annual audit of the year-ended December 31, 2024.

DNA was required to update all the policies by June 2, 2025.

As of January 15, 2026, management has updated all but one policy noted in the OIG report.

Criteria 45 CFR Subtitle B - Subtitle B—Regulations Relating to Public Welfare, Chapter XVI - CHAPTER XVI—LEGAL SERVICES CORPORATION, § 1600.1 - § 1600.1 as further clarified in the LSC Financial Guide.

Effect As of December 31, 2024, DNA is not in compliance with Legal Services Corporation federal statutes as further clarified in the LSC Financial Guide.

Cause Primarily due to turnover and short staffing in the accounting transaction cycle. Additionally, with the last update of the accounting policies in November 2019, many of the policies have not since been updated as they do not conform to the LSC’s current compliance requirements.

2024-LATE FILING OF THE SINGLE AUDIT REPORTING PACKAGE WITH THE FEDERAL AUDIT CLEARINGHOUSE Title: All included on the Schedule of Expenditures of Federal Awards Agency: All included on the Schedule of Expenditures of Federal Awards Pass Through: All included on the Schedule of Expenditures of Federal Awards Assistance Listings Number: All included on the Schedule of Expenditures of Federal Awards Type of Finding: Significant Deficiency, Non-compliance Compliance Area: Other - Late Filing of Single Audit Reporting Package Federal Award Year: 2024 Questioned Costs: None

Condition DNA did not submit, during the fiscal year ending December 31, 2024, their Single Audit reporting package for the year ended December 31, 2023 (financial statements, data collection form, and corrective action plan) within the required time period. The December 31, 2023 single audit reporting package was due September 30, 2024. However, the report was not submitted until April 30, 2025.

Criteria 2 CFR 200.512 stipulates the requirement that the Single Audit reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period

Effect Late reporting could cause additional oversight or restriction by grantors

Cause Internal controls were not properly designed, executed, and monitored to ensure a timely preparation of reports and records for audit purposes. As a result, management did not comply with the submission requirements of 2 CFR 200.512